Tag Archives: business plan

Fail Fast? Fail Often?

There is a culture of failure inherent in entrepreneurship and in intrapreneurship (entrepreneurship within a larger organization or company). This culture is summed up in Silicon Valley’s startup mantra of “Fail fast. Fail often.” Failure is often celebrated by entrepreneurs and innovation experts as a way to get to success. A badge of honor to testify that they tried and failed before getting to the next big idea.

There is truth in this concept: in order to create something new or make unexpected connections between things, one has to embrace failure. In education, embracing failure is fundamental for students to take risks with their learning and the way they see the world and interact with it.

Should failure be celebrated? What happens when failure has tangible financial and opportunity costs for business not to mention its impact on entrepreneurs, their families and their friends. What happens when we have different ideas of failure? Has someone failed just because they don’t fit in with what society wants from them?

One of the best analogies of entrepreneurship is: “Starting a business is a lot like jumping out of an airplane and assembling the parachute on the way down.” But what happens around the entrepreneur?

In a series of articles, I will explore the question of failure and entrepreneurship and share with you stories from the entrepreneurship (and intrapreneurship) scene around me. Check out the hashtag #resilientwife to find out more about this new endeavor of mine.

Obviously, entrepreneurs want to talk about failure in the context of success – a sort of rite of passage or journey to creating something of value. Understandingly, no one wants to be defined as a failure or be told that their business is a failure. Here lies the challenge…to represent failure, entrepreneurship and resilience accurately.

EMC

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cop·y·cat

Don’t be a “copy cat”. We want to hear your voice, your ideas, your work. Be authentic and true. Write with mistakes and correct them later. Go with the flow of your ideas and you will see that it leads you to somewhere that no one else could have imagined or written down. You cannot copy inspiration. Intelligence. Wit. Yourself.

If you do copy. Do so gracefully. State where you took the information. Hat tip your source. Thank someone who inspired you.

If you copy and take praise, remember that it is not professional and you lose moral authority as a person or entity or project you are associated with. Although the source may never find out, you will know that you did and that’s what matters.

– EMC

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Savvy Saturday July 18, 2015

“Long-range planning does not deal with the future decisions, but with the future of present decisions.”

– Peter Drucker

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Entrepreneurs: what is the price of your dream?

One of the most valuable lessons I have learned in the last eight years is that the valuation of a company is based on the story that is being told about its future.

Our sense of reality – our idea of what has actually taken place – is filtered through our experiences. Most of you will agree that two people can observe the same event and come out with different accounts of what happened based on a personal bias. The same holds true for an investor or partner in a business; their experience informs their decision making. Their experience with a company in the same industry, or with the same management structure, or with a similar channel strategy, or “what happened” 10 years ago, convinces them that their past experience will transfer to the new project or business.

On one hand, it’s humanity’s way of coping with new things. We look to the past in order to inform future decisions. When performing a valuation of a company, most investors take a number of factors into consideration in order to balance bias and risk. Nevertheless, we always take the future back to the present or project the past to the present in order to know how much a business, idea or project is worth in today’s world.

What do we pay today for a dream? If an entrepreneurial idea does not fit our past experiences – whether we are a seasoned investor or an amateur – how do we value the company?

Our story is essential in convincing amateur or professional investors and partners. Yet, even with an amazing story, bias still plays a critical part in valuation and decision making. What happens after we tell a story that leaves an investor wanting more? The professional investor might be thinking “how much will I get when we go public or in round two” rather thentrepreneur bikean “this is going to be interesting” (a trademark of an amateur investor according to Seth Godin’s presentation in “Nearly Impossible”).

We are always told to look to the future and we tell our children to do the same. Nevertheless, many times we base investment – and even life – decisions on the past. What is the price of your dream?

Suffering, patience, self-negation, are part of the life of an entrepreneur and often the price we pay for our dream. Money is not always the objective of our venture but it certainly is what it comes down to when we are talking about investment. Sad but true. Simple but not inclusive. Cents over sacrifice.

Net Present Value. Future cash flows. Debt and working capital. Sweat and sacrifice. What do we pay today for a dream? Sometimes the craziest dreams run by risky entrepreneurs are the ones that win. How do we make sure that the best idea wins? There really is no formula for success – however convincing your story or however poor your track record. Sometimes the best ideas look like bad ideas and sometimes disruption occurs undetected until it has slowly and fundamentally transformed an industry.

One thing is certain however. We look for value and relevance. If your story shows your investor that your idea is valuable and is relevant in the lives of people, you may just have a way of selling your dream and getting the much needed capital to make your venture grow, prosper and be valuable to you, your investor and the people you serve.

EMC

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Savvy Saturday March 1st, 2014

Any business plan won’t survive its first encounter with reality. The reality will always be different. It will never be the plan.
–Jeff Bezos

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The biggest factor in entrepreneurial success is…

BELIEF.

Entrepreneurs naturally have a strong belief in their business idea and how they will make an impact on the world; they are driven to find solutions to the problems (inefficiencies, conveniences, why can’t it work this way?) around them. But it’s only when that belief is translated into action and into a product or service that we can use does it become real and successful.

The biggest factor in entrepreneurial success is belief. Of course there are ways – quantitative and qualitative – to predict failure or success of new business ideas but it is belief behind the idea and behind the entrepreneur that gets the idea noticed, funded and adopted by society.

Business plans identify and describe the opportunity and talent behind an idea but it is belief that brings entrepreneurs, investors and market together.

Making the idea work = belief.

Get funded = belief.

Get noticed = belief.

Be successful = belief.

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